Digital music sales drop for the first time since the iTunes Store’s inception

By , Jan 4, 2014

iTunes 11 (expanded music view)

Proponents of digital music are in for a surprise as sales of digital albums and individual songs nosedived last year, for the first time since Apple revolutionized the music business with its iTunes Music Store back in 2003. According to a report by Billboard, industry executives are once again oblivious to the fact that consumers’ tastes are changing and are blaming streaming music services such as Pandora and iTunes Radio for the drop. The full breakdown is after the break…

Billboard relays a Nielsen SoundScan survey of full-year digital music sales revealing that individual song purchases on digital services dropped from 1.34 billion units in 2012 to 1.26 billion in 2013, a 5.7 percent decline. That didn’t come out of blue as per-track performance saw weak results over first three quarters of 2013.

As for sales of digital albums, these fell 0.1 percent to 117.6 million, down from 117.7 million units the year prior. However, that’s peanuts compared to a substantial 14.5 percent decline in physical CD sales.

Most-downloaded song of 2013?

Robin Thicke’s Blurred Lines with 6.5 million tracks sold, followed by Thrift Shop by Macklemore and Ryan Lewis.

Here’s the landscape of album sales marketshare for 2013:

  • CDs lead with 57.2 percent
  • Digital music accounts for 40.6 percent of all album sales
  • Vinyl format is responsible for a two percent share
  • Cassettes and DVDs made up 0.2 percent of all album sales

iTunes has remained the most popular venue for buying digital music with a 40.6 percent share of total U.S. album sales in 2013. In fact, Apple’s digital-only music store has been the biggest music seller in the world since 2010.

Beyonce iTunes

At the same time, music sales at Target and Walmart dropped 16.3 percent to about 78 million units and now comprise nearly 27 percent market share. Best Buy and Trans World saw a twenty percent decline to 39 million album units to comprise a 13.5 percent market share last year, the survey found.

Unfortunately, Nielsen SoundScan has not yet publicized streaming music performance so we have no cold, hard numbers to support the thesis that digital music sales are now being cannibalized by the growing popularity of streaming platforms such as Pandora, Rdio, iHeartRadio, iTunes Radio and many others.

iTunes Radio (teaser, iPod touch, iPad, MacBook Air, Apple TV)

And of course, the music biz has failed to see the writing on the wall, all over again. As Billboard put it, “industry executives initially refused to attribute the early signs this year of digital sales weakness to the consumer’s growing appetite for streaming”.

And you know what’s really unexpected?

That vinyl sales saw a healthy 31 percent uptick in the past year – go figure.

I must say I’m not terribly surprised by this development.

I used to be a frequent buyer at iTunes, having spent hundreds of dollars over the past decade purchasing individual songs and albums. That was before my music-listening habits started to change after I discovered Spotify, and especially following Apple’s introduction of iTunes Radio, a free music streaming service supported by ads.

I will still buy music files from time to time – typically individual songs and sometimes even whole albums – but I just don’t see the point in buying music. We live in a rental society now and it’s dawned on me that paying ten bucks per month to stream any song I want on Pandora or Rdio or whatever is a much better proposition to what alternative?

Dropping ten bucks on a new Beyoncé album?

Thanks, but no thanks. As far as I’m concerned, that’s no longer money well-spent, not in this economy – and I’m not even mentioning that music this decade has been terrible.

And what are your music consumption habits these days?

Do you rent your music exclusively or do you still believe in buying MP3s?

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  • mhchehade

    cool

  • Anonymous

    Spotify & Pandora now they’re both free on mobile

    • Matt

      Swell spotify isn’t completely free, you can’t just go search a song and listen to it all you want.

      • marcus1324

        On Spotify, you can find the song on an album with just one song and click shuffle. So technically you can search a song and listen to it all you want.

  • Linton Findlay

    Maybe it was just a shit year for music and people don’t want to buy any of it

    • ✪ aidan harris ✪

      That or the fact that music is extraordinarily expensive and people don’t have the disposable income anymore. Those that do would probably rather spend their money on spotify or other music streaming services…

  • Josh

    My Spotify subscription has dropped my music purchased by at least 50% if not 75%.

  • iltas

    how i buy paid apps frm cydia without paybal
    can i use facebook card

    • marcus1324

      You can use your credit card I believe.

      • BananaAnna

        no you can’t use your credit card. fact is you either use paypal or amazon. Yes, AMAZON. So you could in theory link your credit card to paypal and then use paypal. I don’t think that you can pay as paypal guest so thats that. Paypal or Amazon. your choice. :)

      • marcus1324

        Oh ok usually with online payments there is that PayPal guest option so I was just guessing.

    • Luism27

      You can use your Amazon account if you have one!

  • Apanizo2

    Also there is mp3skull .com :/

  • Jeremy

    It was a shit year for music I think. Only a few good albums released but that’s about it.

  • Ricardo Monterrubio

    what surprises me is that still a gigantic number of people buy songs and albums in itunes

  • William Melendez

    “Especially following Apple’s introduction of iTunes Radio, a free music streaming service supported by ads.”

    Not necessary if you have a jailbroken device

    • Matheus Lisboa

      Or if you’re a itunes match user…

    • marcus1324

      This is illegal, which repo is this?

      • William Melendez

        Oh Marcus … don’t be a such a Boy Scout.

      • marcus1324

        I bought iTunes Match though :(

  • GL1

    Maybe people are realizing that most music nowadays is crap.

    • NSA

      not really, there many ways to get FREE music. For example, I use iTunes Radio so when I like a song I use shazam to know the name of the song, then go and download it from YouTube in any format I want.

  • Prathik Nair

    Not to mention torrenting music and turning youtube videos into a mp3 file

    • Edoc

      That has little to do, people that download stuff wound’t buy it anyway, or end up buying, so it doesn’t matter either way.

  • Christian Mejía

    Oh no
    Oh no
    Oh no
    KoolAid Man: OHHH YEAHH!

  • ★LEA – MILEY – DEMI★

    Bangerz was so good I had to buy it!

  • Al

    “CDs lead with 57.2 percent”

    I just want to know of the perspective from the people who buy CDs, it’s been years since I bought a CD.

    • Christian Mejía

      I bought a cd for my sister for Christmas because she wanted her favorite bands album. She also broke her iPod so good thing there’s always another method

    • tbdm147

      I buy cd or vinyl about every week. I can download for free (illegal, yeah), but when I buy physical I can play it when my phone is dead, an aux port isn’t available, and I get something tangible to hold on to. I love the big artwork, lyric sleeves, and additional art.

    • Falk M.

      Okay, let’s see:
      •CD has much better quality
      •You don’t merely license the music files, you get to own something physical
      •I love putting nice looking CD cases in my shelves. Unlike my computer, my place where I live doesn’t have digital storage itself and I hate empty walls, shelves etc…
      •CDs are classy – a very subjective reason I know
      •Available offline – as in buy wherever you are! I love buying CDs at concerts and getting them signed. What does a signed digital album look like? It doesn’t haha! (okay, you could add a pdf, but really? A signature is all about it being an original and physical!)
      •I’m sure there’s stuff I forgot, but those are the main reasons for me

  • Matheus Lisboa

    I live in Brazil and it’s hard to find the albums I like and when I do it costs like 30 dollars. But I do buy the ones of the bands I like the most

    • marcus1324

      Usually I just listen to songs in the car or on YouTube. The songs I really like are the one’s I buy on iTunes.

  • Ben

    Pandora is better in my opinion, at least for me; it chooses most of the songs I like and its cheap!

  • simon morfin

    ME I JUST DOWNLOAD EVRYTHING 4 FREE. I NEVER PAY 4 ANYTHING IM CHEAP.

  • simon morfin

    I DOWNLOAD ALL THE SONGS,MOVIES,BOOKS, MAGAZINES,APPS,PROGRAMS ETC ETC ETC. FROM DIFERENTS TORRENT SITES LIKE PIRATEBAY KICK AZZ TORRENTS ETC ETC ETC. I PAY 800 CASH 4 MI IPHONE 5S 64 GIGS UNLOCK, AND THATS THE ONLY SPEND IM MAKING UNTIL THE NEW IPHONE “6″ I NEVER HAVE USE ITUNES PURCHASES AT ALL. LIKE I SAID IM CHEEP.

    • http://www.idownloadblog.com/author/dujkan Christian Zibreg

      What’s up with ALL CAPS?

      • simon morfin

        I TYPE DIFERENT. UR TYPING IS LIKE EVERYBODY. ” THE RIGHT ONE” “THE CORRECT ONE” LOL.

      • Ian Jackson

        Didn’t you know? CAPS LOCK IS THE CRUISE CONTROL FOR COOL? But, even with cruise control you have to steer. And he steered right into a wall.

  • Joseph A. Ahmad

    Definitely a consequence of the introduction of Radio services like Spotify, Rdio, and even Pandora. But the biggest factor of all, in my opinion, is iTunes Radio because it’s integrated right into iOS devices and MacBooks. And Apple knows what it’s doing because the money they have lost from digital downloads, they have offset and made up with iTunes Radio ad spots.

  • Dave Filipiak

    Music today sucks. When Blurred Lines and Thrift Shop are #1 and #2, you have problems. What do you expect?

  • Jay Phillips

    I haven’t paid much attention to the music scene for the past 10 years. I’ve probably only bought 3 albums, 2 of which are greatest hits from decades ago, and a hand full of newer songs. Songs that are worth listening to more than a few times are worth buying but most new music gets old fast and just takes up space on my phone. However since recently getting into mashups I listen to a lot of new music, made by me. Taking the instrumentals and vocals from different songs and mixing them together is fun and gives me and my friends something new to listen to.

  • applepie555

    soundcloud

  • andrewgoldsmith

    I was shocked to read that CDs still have the biggest market share!

  • hkgsulphate

    Apple will ban Spotify and Pandora soon, very soon

  • 4p0c4lyps3

    KickassTorrent ftw!

  • tbdm147

    I use Google Play Music, but if I listen to an album more than three times I go buy a copy of the cd or vinyl.

    That being said, I don’t think you should be happily admitting we are in a rental society now. Companies are destroying the idea of ownership, and they can take away what we “have” without a moments notice.

  • Yujin

    I dont think it is pandora or radio offerings that are diminishing sales. Most likely is cause music is not that good at the time. Sure you have the hits and some are really good but at the present time, there is not really great artist that can move sales like others did in the past.

  • simon morfin

    F U FG. U STILL LIVE WITH UR MOM. JACKSZZ. LMMFAO.

  • Reya Huang

    I buy my music! And I spend $200 getting my hands on a single album. Yup, I’m crazy, but I’m not the only one. Guess it’s a difference in fanbases, JE fans, no matter who their favourite idol is, tends to want to collect their idol’s goods, without caring for the price. Many spend hundreds for a single concert. Not to mention Japanese stuff, including services, are just so damn expensive… $5 for news, $5 for KeyHoleTV, $3 for program subscription, $40 for helping buy the newest album + shipping fees, $150 for all versions of the newest album… But Takki’s worth every cent of my ever shrinking wallet!